Hard-Pressed Orenburg Oblast Turns to Better-Off Nizhny Novgorod for Money to Pay Bonuses to Those Signing Up for the Russian Army

Paul Goble

            Staunton, Feb. 6 – The governments of Russia’s poorer regions find themselves in a bind: Moscow rates them on their ability to get men to sign up for service in the military but neither leaves enough tax money in the regional government’s pockets to pay or returns enough in subsidies to allow them to compete with better off regions.

            Now, one poor region, Orenburg, has come up with a solution of sorts. It has borrowed money from wealthier Nizhny Novgorod Oblast so that it can get enough men to sign up so as to avoid problems with Moscow (storage.googleapis.com/istories/stories/2026/02/06/rossiiskii-region-vpervie-poprosil-dengi-na-viplati-kontraktnikam-u-drugogo-subekta-rf/index.html).

            According to the Important Stories portal, this is a first; but it does recall the arrangements of the first decades of Soviet power when better-off oblasts were required to help their poorer counterparts -- although the new arrangement has potentially more serious consequences because the regions themselves and not Moscow are behind it.

             The portal’s Sonya Savina says that Nizhny Novgorod in December 2025 transferred to Orenburg 400 million rubles (six million US dollars) to pay for 1,000 bonuses that the poorer oblast had agreed to pay to men who had signed up in the last quarter of that year but did not have the cash on hand to do so.

            Aleksandra Prokopenko, an expert on Russian politics and economics, says that this arrangement resembles “a ‘horizontal’ subsidy in which the expenditure obligations of one budget are covered by another,” an arrangement that was legalized by Moscow in August 2019 but that hasn’t been reported being used except for cooperative projects like bridges.

            “If the goals correspond to the powers of the recipient region, and the Nizhny Novgorod region has sufficient budget funds for this, the parties conclude an agreement with clearly defined conditions: what exactly the funds can be spent on, within what time frame, what results need to be achieved, and how to report,” the expert says.

In this case, Orenburg won’t have to return the funds to Nizhny Novgorod unless the former violates the terms of its agreement with the latter.  That is very unusual, Prokopenko says. “Usually regions do not finance each other’s expenses;” and she adds that she doesn’t think this was “an initiative” by Nizhny Novgorod.

Rather, she suggests, it may well be “one of the ways [for Moscow] to solve the problem at a regional level without allocating additional funds from the federal budget.” Prokopenko is probably correct in that, but the Orenburg-Nizhny Novgorod lash up may open the way to kinds of cooperation among regions that could lessen rather than increase central control.